At a superficial level, it would appear that the Comcast/Time-Warner businesses wouldn’t remove competition as they generally serve non-overlapping geographic areas. Additionally, Comcast would divest and swap systems with Charter to maintain less than 30% nationwide market share in the Pay-TV market. The reality is that there are different market segments, beyond distribution of pay-TV, where a Comcast/Time-Warner merger could be dominant players with greater than 50% market share. At the 2015 ACA Summit, Jeff Blum Senior Vice President and Deputy Legal Counsel of Dish Network said that they found 53 areas of harm from a Comcast/Time-Warner merger.
One example of a harm would be in the local advertising market, where a dominant player could effectively drive up prices for local television advertisers. Another area of concern is the broadband market, where, with the new FCC definition of broadband of 25/4 Mb/s downstream/upstream, the combined Comcast/Time-Warner entity would have north of 50% broadband penetration. One potential harm from this type of market share would be the potential choke point that the broadband network, combined with the Comcast’s extensive content control could effectively create a choke point.
Blum’s perspective on this issue from last month’s ACA Summit lends substance to the rumors suggesting that the Department of Justice will attempt to block the deal.
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